Locked Our New 30 year Fixed Rate Mortgage at 4.875%

It took 3 tries, but my wife and I finally locked into a 30 year fixed rate mortgage at 4.875% with no fees or points. We are borrowing $241k at this rate. I decided to borrow as much as possible given how much lower this rate is compared to our other 3 mortgages. I would have borrowed more if we could have and used it to pay down one of our other mortgages.

We first locked in back in the end of November at 5.63% with no fees/points. Rates ofcourse continued to fallover the next month and we then applied and locked into a 4.75% with .5% orgination fee/no point loan. Finally we moved 1 more time and applied for a 4.875% with no fees/points where the lender also agreed to reduced lender fees.

How Do You Withdraw a Loan Application?
Well it turns out it is fairly easy. On the first loan application we simply faxed in a letter that read "Please withrdaw our loan application". All we had to pay was $350 for the appraisal that had already been performed and we were able to reuse the appraisal for the final loan. The second loan application I simplied called then and and requested they cancel my loan application.

I had always been under the impression that once you actaully filled out and submitted the application that you were locked into that lender and it would be difficult (ie expensive) to walk away. Turns out it was very easy for us to move around and take advantage of dropping interest rates. We were able to shave off about $100/mo off our future mortgage payment by doing so.

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Comments (8)

Any hints on where?

Posted by jay | December 24, 2008 1:31 PM

Which lender did you go with? What is the APR of the loan?

Posted by CPA1298 | December 26, 2008 9:20 AM

Nice! I still believe that real estate prices are going down further, but it's going to be hard to beat affordability when you combine falling prices and low interest rates.
That is a ridiculously low rate for a 30 year fix.

Posted by Rich | December 27, 2008 1:57 AM

.5% origination fee is the same as paying half a point... but supposedly the average fee is .8 points.

I keep an eye on the wholesale rates, which are posted daily by the "Mortgage Professor" at:
http://www.mtgprofessor.com/Wholesale%20Price%20Data/today's_prime.htm

I'm planning to refi, but I think the rates will continue to go lower over the next 6 months (because I think the Fed will buy 30 year notes, driving yields lower). Also, because banks cut staff recently, they haven't been able to keep up with the flood of refi applications, and therefore they haven't reduced their interest rates as fast as they ordinarily would to maximize their deal flow. So I'm holding out for now.

Posted by Thisson | December 29, 2008 11:07 AM

4.875% is so awesome. And for 30 years - who knows how high rates will get at some point during that period.
Businessweek.com had an interesting article on how important it is to shop around right now too, because loan rates are all over the place - I think it's still on their front page if you want to check it out.

Posted by Chris | January 2, 2009 1:19 PM

Looks like you snared a great rate? Can you share with us some more detail into this process?

What company gave you such a great rate?

Posted by MEG | January 5, 2009 8:33 PM

I would love to read a post about refinancing. I expect that you will be looking into since you bought a number of house awhile ago.

Posted by Eric | January 7, 2009 5:42 PM

2mil, I wasn't certain from your note - were all 3 of your applications with the same bank/mortgage company? Or did you somehow take your appraisal to a different company?

Posted by kvan | January 28, 2009 6:23 PM